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Global equities rose on Friday, with the S&P 500 crossing the 5,000-point milestone for the first time ever, as U.S. inflation data raised expectations of an interest rate cut this year, while closely watched U.S. Treasury yields rose.

The greenback reversed earlier gains, falling 0.06%.

Oil notched a gain for the week on worries over a broadening conflict in the Middle East after Israel rejected a ceasefire offer from Hamas.

The MSCI All Country stock index climbed 0.4% to a third straight weekly gain.

The mood in stock markets was buoyed by Wall Street, where the S&P 500 index rose above 5,000 points, helped by big gains in megacap stocks such as Nvidia.

The chipmaker climbed to a record high after Reuters reported it was building a new business unit.

"The new closing high over 5,000 bodes well over the intermediate to longer term, with a key technical level being cleared today," Larry Tentarelli, Chief Technical Strategist with Blue Chip Daily Trend Report, in North Andover, Massachusetts.

"We believe that the combination of very strong corporate earnings, strong jobs data, strong GDP data and declining inflation are an excellent backdrop for equities going forward."

U.S. monthly consumer prices rose less than initially estimated in December, but underlying inflation remained a bit warm, data showed on Friday. The data revision did little to alter expectations for central bank rate changes.

U.S. inflation data for January is coming next week.

The Dow Jones Industrial Average fell 54.64 points, or 0.14%, to 38,671.69, the S&P 500 gained 28.70 points, or 0.57%, to 5,026.61 and the Nasdaq Composite gained 196.95 points, or 1.25%, to 15,990.66.

The yield on benchmark U.S. 10-year notes rose 0.7 basis points to 4.177%, from 4.17% late on Thursday.

The 2-year note yield, which typically moves in step with interest rate expectations, rose 3.2 basis points to 4.4883%, from 4.456% late on Thursday.

Gold prices came under pressure from the stronger yields, with spot gold down 0.44% at $2,024.16 an ounce. U.S. gold futures settled 0.4% lower at $2038.7.

Brent crude futures settled up 0.7% at $82.19 a barrel, and U.S. crude futures finished up 0.8% at $76.84.

European shares ended slightly lower under pressure from rising yields and sliding L'Oreal shares.

The pan-European STOXX 600 index closed 0.1% lower, but still eked out a weekly advance of 0.2%.

L'Oreal dropped 7.6% after the French cosmetics company reported underwhelming fourth-quarter sales growth.

Inflation in Germany, Europe's biggest economy, eased in January to 3.1%, adding fuel to bets on when the European Central Bank will begin easing rates.

However, euro zone bond yields hit multi-week highs after several ECB rate setters warned against easing monetary policy too early.

"Indeed, it seems pretty clear now that the ECB will be waiting for European wage data statistics at the end of April before likely cutting rates in June," ING bank said in a note.

Japanese shares hit 34-year highs. The yen recovered after falling to a 10-week low, with traders reassessing their bets on how quickly the Bank of Japan might raise rates.

In China, mainland markets were closed and Hong Kong traded thinly and shut early, with the Hang Seng down 0.8% amid worries authorities might not deliver on promises for support.

"I am betting that (decisive action) is happening," said Chi Lo, senior markets strategist for Asia Pacific at BNP Paribas Asset Management.